Cincinnati's 3CDC charged with 'demolition by neglect' in historic Over-the-Rhine

City board: Developer is letting structures rot

CINCINNATI - Anyone who cares about preserving Cincinnati's old buildings knows that 3CDC has saved scores of structures in historic Over-the-Rhine.

But there is a side of the Cincinnati Center City Development Corp. less well known: The nonprofit developer has let vacant buildings decay until they have become unsafe and could require emergency demolition.

And that's a crime in Cincinnati. It's called demolition by neglect and is a first-degree misdemeanor.

The city-appointed Board of Housing Appeals on May 1 accused 3CDC of demolition by neglect related to a boarded up house at 1321 Republic St. The board also ordered the city to collect past-due vacant building fees from 3CDC estimated at $24,500. Building owners are required to pay fees to the city to keep properties vacant, unless waived by the Board of Housing Appeals.

The vote came after a 3CDC representative testified that the nonprofit had done little to stop the building's ongoing deterioration.

"Since the entire history of this building has been to intentionally neglect it, this is literally criminal behavior," board Chairman Mike Morgan said during the May 1 hearing.

It marked the third time the Cincinnati Board of Housing Appeals accused 3CDC of neglecting its property. The board took similar action earlier this year for 3CDC properties at 1323 Republic St. and 1408 Vine St.

It's unclear whether 3CDC has been billed for past-due fees on the other two structures.

But the board's actions raise questions about whether 3CDC – the influential organization that city council has put in charge of Over-the-Rhine's rebirth – gets more leeway from the city when it comes to code enforcement than smaller, independent developers who are working to rehab old buildings in the neighborhood.

Code enforcement is the city's tool for making sure buildings are safe for the public as well as police and fire fighters who might have to enter them in times of crisis. Buildings left to rot can pose hazards and lower the property values of structures around them.

A 3CDC spokeswoman defended the organization's work in Over-the-Rhine and bristled at the Board of Housing Appeals' action, saying Morgan has "some sort of personal vendetta" against the nonprofit.

"We're certainly in the business of preserving all we can in the neighborhood," said Anastasia Mileham, 3CDC's vice president for communications. "I think he can probably find a few other property owners in Over-the-Rhine to lecture about preserving buildings."

Morgan said there's nothing personal about the votes taken by the board, an administrative tribunal appointed to resolve controversies over the city's property maintenance and zoning codes, especially as they relate to vacant or condemned buildings.

"The Board of Housing Appeals has ruled in 3CDC's favor 99 percent of the time," he said, adding that the law has supported those rulings.

 "In these instances where the law was completely contrary to what they wanted, we ruled in accordance with the law," said Morgan, who is also a lawyer.

Records: Other Problem Properties

In an email to WCPO Digital after Tuesday's original story published, Mileham said 3CDC now intends to stabilize and restore the building at 1321 Republic St. The organization has not made final development plans for the structures at 1323 Republic St. and 1408 Vine St., but "stabilization is underway," she wrote.

WCPO Digital has discovered those three structures are not the only code enforcement problems 3CDC has had with the city, however. A review of city inspection records for the organization's properties dating back to 2006 found:

• A total of 98 3CDC properties have had some type of code violation, ranging from litter to leaking roofs to rotten floors. All had code violations before 3CDC bought them, and the vast majority have been remediated.

• Seven instances where Cincinnati building inspectors complained that historic buildings owned by 3CDC were continuing to slowly deteriorate due to lack of maintenance.

• Another 3CDC property labeled "dangerous and unsafe" with a "hazardous entry warning" so police and firefighters don't enter the building and risk injury.

• And in one note, dated March 12, 2012, Inspector George Duesing wrote: "If this was not a 3CDC building inspector would fine or bring to court; building continues to go downhill for lack of decent roof."

Duesing did not return calls seeking further explanation.

Next page: How much 3CDC spent

But Duesing's supervisor said the note doesn't mean the city's enforcement of building code violations is any different for 3CDC than for any other property owner in the city.

"There's no separate rule for them except they have made a lot of repairs to buildings," said Edward Cunningham, manager of the city's division of property maintenance code enforcement. "I guess the thinking is that they're going to get to this. It looks to me like maybe there's a reluctance to take this entity to court because of the amount of money that's being spent."

Millions Spent To Preserve Buildings

3CDC has spent nearly $30 million over the past nine years to land bank historic buildings in Over-the-Rhine, Mileham said.

And of the 98 properties studied by WCPO Digital, records indicate the vast majority complied with city rules and regulations.

Fifty of the properties were stabilized and had successfully obtained waivers for Vacant Building Maintenance Licenses, or VBMLs. (The city requires owners of vacant buildings to obtain VBMLs and pay fees to ensure vacant buildings are kept safe and secure and don't pose a risk to the public or first responders.)

Another 20 had "land bank" status, and inspectors noted they are properly boarded up until the nonprofit is ready to start redeveloping them.

During the May 1 hearing, a 3CDC representative said if the organization isn't allowed to raze the property at 1321 Republic St., 3CDC will work on that building in due time, too.

But Mileham said in a subsequent interview that the building is not developable.

"If they're not developable, they can create a problem for the development of the ones around it," she said. "We're certainly in the business of preserving all we can."

Mileham said in her email Tuesday that the building is "not developable by itself – we can incorporate it into a larger development."

In interviews with WCPO Digital, several Board of Housing Appeals members said they sympathize with the work 3CDC is doing and how difficult and expensive it can be to maintain the crumbling historic buildings the nonprofit has purchased in Over-the-Rhine.

"The feat that they have to tackle in order to save a building because there's so much deterioration is just enormous," said Stefanie Sunderland, executive director of the Cincinnati Northside Community Urban Redevelopment Corp. and a Board of Housing Appeals member.

3CDC's redevelopment work is complex and costly, largely because so many of the buildings in Over-the-Rhine are in such bad shape because of decades of decay.

"I credit 3CDC for saving and investing in so many of the important buildings in Over-the-Rhine," said Jeanne Rehling-Golliher, CEO of Cincinnati Development Fund, which helps fund redevelopment work in the neighborhood. "I do think their whole disposition is to try to improve and restore, and sometimes it's just not economically feasible."

Rehling-Golliher added she wishes every building in Over-the-Rhine could be saved – equating each demolition to a building's "murder." But practically speaking, she said, sometimes buildings must be "euthanized" as a last resort.

Do Different Rules Apply?

3CDC owns 176 properties in Over-the-Rhine through its OTR Holdings LLC and another 23 through its OTR Predevelopment LLC, according to Hamilton County Auditor Dusty Rhodes' office.

The organization has restored – or is in the process of restoring – 107 historic buildings, according to its latest update.

In fact, 3CDC's two rotting buildings on the 1300 block of Republic Street sit less than a block away from the Nicolay building at 14 th and Republic Streets, which is being developed into 10 condominiums. And they are less than two blocks from other properties bearing banners with the nonprofit's logo that read " ANOTHER HISTORIC BUILDING PRESERVED."

"We all have a lot of appreciation for the good things 3CDC has done in Over-the-Rhine," said Ken Smith, a Board of Housing Appeals member and executive director of the community development organization Price Hill Will. "But it doesn't give them a blank check to do some bad things."

Morgan argues, however, that to some degree, that's just what 3CDC has gotten from the city. Despite the ongoing neglect of several of 3CDC's properties, officials have yet to file any criminal charges against the nonprofit, he said.

"There should not be two sets of laws," Morgan said. "If the law applied to 3CDC and it was actually enforced against them, then they would be calling for improvements in the system that would help everybody in the city of Cincinnati."

Ken Jones agreed. He's a local architect and long-time member of the city's Historic Conservation Board who has clashed with 3CDC in the past over demolition of several buildings in Over-the-Rhine.

"I think 3CDC is looked at a little more favorably because of their status and what they've been doing," Jones said.

Next page: 3CDC buildings now on city's 'radar'

But developer Chris Lacey said he doesn't think 3CDC has any kind of unfair advantage over smaller developers like him.

"Yeah, they have influence, and who's to say influence is bad?" said Lacey, whose A&L Properties was recently recognized for its work by the Over-the-Rhine Chamber of Commerce.
"They have leverage. They have contacts. They're getting stuff done."

And the city's perspective, the laws do apply to 3CDC the same way they apply to everyone else, Cunningham said.

The city's building codes are designed to protect the public as well as police officers and firefighters who might have to enter old structures in an emergency. And, Cunningham said, every property owner must follow them.

"There's no different standard," Cunningham said. "The only thing that would be in their favor maybe is that they have saved a lot of these buildings from demolition."

Cunningham said he wasn't aware of the Board of Housing Appeals actions until contacted by WCPO Digital. The city will be sending 3CDC a bill for past-due VBML fees for 1321 Republic St., he said. And city officials will look into the other 3CDC buildings that might have persistent problems, Cunningham added.

Now that WCPO Digital has made the city aware of the problems, Cunningham said, "That's on our radar to be addressed."

Still, despite the board's action, the buildings on Republic and Vine streets ultimately could be demolished.

If 3CDC can prove the structures are too rotten to be saved at a reasonable cost, city officials could grant permission to raze them, Cunningham said.

And that's what worries those who believe Over-the-Rhine's historic buildings are the key to the continued revitalization of the sprawling neighborhood.

"How do you balance development with preservation?" asked Bruce Goetzman, an emeritus professor of architecture at the University of Cincinnati and member of the Board of Housing Appeals.

"If you tear too much down,'' he said, "you don't have anything left."

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